US Equities Continue to Remain Weak – Forex Forecast 2/10/16
EUR/USD Creates Another Push Up
The Euro has continued to rally to the upside. When we enter fresh territory we always have very limited levels to work from. This is definitely the case with the upper levels for the Euro. As such once we broke our first upper point we didn’t have another level from which I would have considered a stop run short. To start today’s trading we again work off the most recent high as that is the point where any short position officially becomes under water. This type of level where one side of the market (long or short) is officially in a negative position, is often one of the better potential manipulation points as it holds a great deal of liquidity. As always, we still need to see a valid confirmation entry trade setup to enter a position. If we are going to continue to the upside, then I like a stop run of of our first lower level on the chart. If we get to the second level it would be more of a short term reversal level rather than a point I would expect the upside move to rally to new highs from.
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Previous Move Down Not Broken
The GBP/USD has moved into a wider range but the downside move is still in tact at this point. We do have two upper manipulation points to start the day. If we are going to continue to down then I would be looking for a stop run short from one of the two listed points. Our lower levels on the other hand are quite weak. We only have one lower level and it is the current weekly lows. This is another area that would put the entire long side of the market in the red. Obviously when I say the long side of the market would be red if that level breaks I’m referring to short term positions of a few days or less which is what we are generally looking for in regards to high liquidity points.
Forex News For February 10th 2016
UK Industrial Production 4:30 AM Eastern: For this month Industrial Production is expected at 0. I know most forex news websites market Manufacturing Production as the most important of the two but the price action shows that not to be true. This has been one UK piece of data that I would not trade against, at least not when a sizable deviation is hit. When we get a sizable deviation of .5 +/- from the expected number we have not only seen a large spike but also continued follow through in the direction of the spike.
Fed Chair Yellen Testifies 10:00 AM Eastern: This is a financial speech and therefore very likely to produce volatility in the market that is capable of a quick 15+ pip move and therefore I would avoid at leas the first 10 minutes of the speech to see how the market is responding to her. If the volatility picks up then I will avoid it personally.